Economic impacts of seismic risk: lessons for Wellington

Release date

18 October 2011

The recent earthquakes in
Canterbury have provided a number of lessons that can be drawn upon to help
organisations in Wellington better prepare for seismic events, Reserve Bank
Governor Alan Bollard said this morning.

"Institutions should focus on preparedness, competency, leadership,
delegation and resilience rather than detailed plans for specific situations
that may not repeat themselves,' he said.

The Reserve Bank had also noted that earthquakes should not be thought of as
a "short sharp event, but rather as a rolling set of shocks with a long
period of continuing after-shocks. These can cause ongoing damage to land as
well as buildings, continued disruption, delay assessment, and slow
reconstruction," he said.

The Bank prepared itself for such events by assigning key people from each
department to support the Bank and its critical business functions should a
disruptive event occur. Other preparations included establishing an Auckland
office to carry on the Bank's core functions, should the Wellington office
ever become inaccessible.

Dr Bollard also noted that disaster preparedness is necessary and desirable,
but not costless. Determining the appropriate balance of such concerns in
advance will always be a challenging task, he said.

Following human life and safety concerns, the Bank's immediate focus
after the Canterbury earthquakes had been ensuring essential economic activity
would continue.

Dr Bollard said this had been followed by a focus on the soundness of the
financial system and the financial health of key economic organisations.
Throughout this period the Bank had remained focused on the aim of price
stability, and had set policy appropriately to ensure this was achieved over the
medium-term.

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